Question

The accountant of Blossom Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2020. Rent revenue Interest expense Market appreciation on land above cost Salaries and wages expense (selling) Supplies expense (selling) Income tax Salaries and wages expense administrative) Other administrative expenses Cost of goods sold Net sales Depreciation on plant assets (70% selling, 30% administrative) Cash dividends declared $32,200 21,200 34,200 118,000 20,800 26,300 139.100 54,900 499,200 983,200 68,200 19.200 There were 20,000 shares of common stock outstanding during the year.

Answer 1

BLOSSOM SHOE Co. Income Statement For the year ended December 31,2020
Net sales			$ 983,200
Cost of goods sold			($ 499,200)
Gross profit			$ 484,000
Operating Expenses:
Selling expenses:
Salaries and wages expense	($ 118,000)
Supplies expense	($ 20,800)
Depreciation on plant assets        ( $ 68,200 x 70% )	($ 47,740 )
Total Selling expenses		($ 186,540)
Administrative expenses:
Salaries and wages expense	($ 139,100)
Depreciation on plant assets        ( $ 68,200 x 30% )	($ 20,460)
Other administrative expenses	($ 54,900)
Total Administrative expenses		($ 214,460)
			($ 401,000)
Income from operations			$ 83,000
Other Revenues and Gains
Rent revenue			$ 32,200
			$ 115,200
Other Expenses and losses
Interest expense			($ 21,200)
Income before income tax			$ 94,000
Income tax			($ 26,300)
Net income			$ 67,700
Earning per share ( $ 67,700 / 20,000 shares )			$ 3.39